Thank you, Kristen. I am a Realtor and I, too, was looking for rentals as stated by the "Home Buyer in...." respondents. I know of no such rental prices that are as low as was indicated. Your numbers are more accurate.

I will go on record as a Realtor who truly cares more about his clients than my commission. I recently gave 100% of a large commission to charity. I'd rather my clients are satisfied than me being "fat." With that said, YES! There are sales people who would sell you down the river without a paddle. Further, in Manhattan, not all sales agents are Realtors. They don't follow the NAR Code of Ethics in their everyday business. Most of those sales people don't even know what it is. I have said repeatedly over the years, interview the agent, get references, figure out who and/or what is more important to the agent (the client or the check). If I lived under a rock and wasn't aware of the general pool of sales people working in real estate, I'd be offended by some of the statements about the people in my industry. I just know that none of the negative comments refer to me or the way I conduct my business.

In regard to buying versus renting, there are as many different answers as there are places to live. No one should really give a blanket statement here. The needs, resources, desires, motivation, appeal are all individual. To do a true cost analysis, we'd have to take a lot more into consideration than just time and price range. Further, we'd have to consider your likes and dislikes and see what would best suit you. Is what you want even available...rental OR purchase!?!?

If you look at some of my other answers on Trulia about buying versus renting, now versus later, etc, you'll see that I continue to say the following: It may be the right time for you, it may not. You should sit down with a financial advisor at the same time that you talk with a Realtor and a mortgage counselor. Over-kill? Perhaps some would think so. I don't. I've encouraged many to rent when it looks like the better option. My philosophy? I make the client happy....they'll call me when they move next....if they stay in Manhattan (rent OR buy) they'll want me to help them....if they move out of Manhattan....I'll find them an agent who fits them best. Anywhere in the world!

For some, I've suggested purchasing because it makes sense for THEM. One of the answers below might be right for you. Enlist the help of the right people to help you find out which one.

Fri May 2 2008, 16:26

Hi Ana:
I'm not a real estate professional but I do live and rent in New York. You can't touch an apartment in New York for the price that was quoted in earlier responses. Be sure to research the facts presented before making a decision.
Based on the latest housing report published for New York you'll find that the average studio rental (non-doorman building) in New York is going for $2,059...1 Bedroom (non-doorman building) is going for $2,792. Things only go up from there unless you are willing to move to an outerborough. Unfortunately, as someone who's always looking for a better rental or buying opportunity I can confirm the numbers are true.

Best of luck in your decision!

Sat Apr 19 2008, 10:20

Hey John,

Capitalism wouldn’t work without self-interest. At the end of the day, your own welfare is of paramount importance to you. Everything else is secondary; that’s just a fact of life.

When you last purchased a new car, did the car salesman tell you that you shouldn't buy the car because it would depreciate by 20% as soon as you drove it off the lot? Of course not - that wouldn't be a good selling point and the salesman wouldn’t sell too many cars.

By the same token, a Realtor™ doesn’t tell her clients that it’s a bad time to buy because that would be equally bad for business. Honesty about the continued deterioration of market conditions doesn’t sell houses. You have to understand that market actors, in this case Realtors™, have to show some sort of optimism about the market, lest they go hungry.

Let the thumbs-down fly.

Good luck to all,
-John

Tue Apr 15 2008, 09:55

Hey John in Connecticut,
Great answer...but I'm just curious...with so many facts and figures clearly stating that folks in bubble markets (NY, LA, etc.) should just rent and not buy, why do the real estate agents on this page constantly say, "It is a good time to buy now." Why is that?

Do they have some sort of vested interest in finding another sucker to lure into an overpriced market?
John in LA

Tue Apr 15 2008, 07:58

Ana,

Here's a paper recently published by the Center for Economic and Policy Research (CEPR).

In brief, the study found that “for several cities with bubble inflated house prices such as Los Angeles, Boston, [New York] and Washington the cost of homeownership is likely to be two or even three times as high as the cost of renting a comparable unit.”

As you’ll see, they determined that New York ownership costs ranged between $2,415 and $3,245 per month, depending on interest rate assumptions.

However, average rentals costs were calculated as….wait for it….wait for it….$1,318.

But hold on a minute you say – they’re not factoring the homeowner’s accumulation of equity. Well, as they say, it gets better.

The researchers determined that in New York, “the equity that homeowners will accumulate in their home after four years” was NEGATIVE $180,000.

Again – this is just a scholarly study using real facts and figures to produce a forecast. I found the rent-versus-buy data, in and of itself, very compelling.

Enjoy,
-John

Mon Apr 14 2008, 20:27

No one can answer this vague question without knowing your particular financial circumstances. Are you qualified to buy or rent in Manhattan? That is the first question that you need answered.

Usually full time students do not qualify for either because they don't have an adequate income. Since you said "we" I'm assuming you have a partner, significant other or a parent with an income. To rent an apartment in Manhattan your income needs to be 40 to 45 times the monthly rent. So for a $2500/month apartment you will need an annual income of $100,000. Many rental buildings and coop sublets do not allow guarantors.

The buildings that do allow a parent as a guarantor usually require that the guarantor's income is 80 times the monthly rent. For a $2500/month rental with a guarantor, the guarantor's annual income will need to be $200,000.

To buy a coop you will need a minimum of 20% down. 25% income to debt ratio and liquid assets left after the closing to cover 2 years worth of maintenance and possible assessments.

If you have substantial liquid assets and a small income purchasing a condo might be easier than renting or purchasing or subletting in a coop.

Your individual financial circumstances determine what is best for you. There is no "one size fits all" in real estate.

The link below is a Manhattan relocation package.

Sun Apr 13 2008, 14:58

Stefani - goldman properties - 160 w 73rd

Sun Apr 13 2008, 13:53

Don't let these pesky numbers get in your way! Buy now before you're priced out FOREVER!

Sat Apr 12 2008, 17:49

"You can buy a place that in the end (after tax advantage and sale profits) will at worst break you even after 4 years."

Are you kidding me? No possibility one can lose? Do realtors have no concept of risk? Then again, why should they care, it is not their money at risk. All they care about is the commission.

Sat Apr 12 2008, 15:47

Ana,
Check out this video:
http://tinyurl.com/4gmglh

If you buy now, it will probably take you 20 to 30 years just to break even on that property...

Also, according the Center for Economic and Policy Research, the average rental cost in New York City is
$1318. The average cost of purchasing is between $2415 and $3245.

http://www.cepr.net/index.php/publications/reports/the-cost-…

You will lose a lot more than 48 rent payments by buying a place in New York right now...
John

Sat Apr 12 2008, 14:02

Where in NY will make a big difference!! Rents are very high in Manhattan, but the advantage in renting is you get to know the area. You can buy a place that in the end (after tax advantage and sale profits) will at worst break you even after 4 years. If you would like to be emailed rental and sales listings in Manhattan let us know :) Space@elliman.com

Sat Apr 12 2008, 12:18

In response to John, he is right but if you took a place in Staten Island which I do believe is still the cheapest boro to live in in NY & put the money you would save on renting & maintenance in Manhattan into an ing account you would probably make some money over the 4 years you are here. Especially if you got an interest only loan & saved the differene in the ing account. Remember you get a big amount back on your taxes one the first 5 years you own. I am sure commutting to Manhattan from Staten Island is worth the money you would save. We even have great places right near the HISTORIAL STATEN ISLAND FERRY ( which is FREE) with views of the city..................afocca@afarealtor.com

Sat Apr 12 2008, 04:37

OK - great answers here by the non-professionals, who, actually, are the real professionals it would seem.

As Fred and Zack have pointed out – the 4 years you’ll be here, and paying a mortgage – you’ll be paying mostly interest. The only way you’ll make money on the deal, in four years, is if the value of your purchase goes up. And, if you think values in Manhattan are going to be higher than they are now in 4 years time – well – I have a bridge I’d love to sell you. It’s accessible from Manhattan.

4 years is just not a long enough period to amortize your acquisition costs over. At the end of the day, can you rent the same place for less than it would cost to buy it? Today, that answer is an unequivocal yes.

Rent. Keep your powder dry and park your 20% in a high yield CD. The blood is already in the streets in New York – why buy before the panic is fully realized?

Fri Apr 11 2008, 18:12

Depending on where in New York you're going, the prices can vary especially in NY. If you are going to be in Manhattan, you can rent or buy in Staten Island, NY where the prices are a lot cheaper.
Currently I do have a 1 bedroom condo for Sale or Rent. It is very close to the VB and not to far from Manhattan. If you are interested please feel free to call my 347-273-1307 & I will send you all the details on it.
Sincerely,
Ann Marie Focca
Broker/Owner
A FAMILY AFFAIR REALTY

Fri Apr 11 2008, 06:08

Fred could you give me the address of those rentals. Ill take it myself or rent it today!!

Thu Apr 10 2008, 11:26

Stefani - I know a doorman pre-war bldg near Amsterdam / 73rd for $3,000 for the 1 bed and $2,200 for the studios. Rents are off and you should know better than to throw around figures as if they were the last and final offer.

Jumbo Mortgages - guess what, OFHEO did raise the limits BUT the big sneak is, in order to qualify for the FNMA rate at the increased level, you pay 2 - yeah that's right - points on the front-end. The effective rate is closer to 6.75%, not the sub sixes folks think. The FNMA changes are OK but they don't do squat for new money, just the I/Os who have to refi.

Zack - Brokers do what they do for a reason. The only math they care about is the size of their commission.....

Wed Apr 9 2008, 08:42

Well, it depends. What are your plans after the 4 years. Will you be able to afford the down payment to purchase?

Tue Apr 8 2008, 22:40

That's alright. Thanks. I've done my manhattan time and am finished with it. If you'd like to refute any of the claims I've made, or change any of my numbers, feel free. I used the ranges you've given, and added mortgage payments, reasonable maintenance (IMO, if i'm wrong, correct me) and reasonable expectations for other expenses and shown that buying on a 4 year time horizon in NYC with hte current mortgage to rent ratio is a poor idea. I'd love to see some numbers and data if you'd like to refute this point. If instead you'll just put in innuendos about my lack of knowledge of the city when you make no claims on the other side, then I believe Ana has all the data she needs.